A stock is a financial trait that links the company’s ownership along with its claim on assets and earnings. The stock positions in the public market known as the stock market that helps people to issue, buy, and sell stocks that trade on a stock exchange. At this common ground, the investors meet up to buy and sell ownership. In this description, you’ll get to know further about what is stock-marketing and the related terms to it.
What is the Purpose of Stock-Marketing
A stock market is a public market that serves two essential purposes. The topmost purpose of stock marketing is to provide a ground to the companies that used their funds to expand their business. The stock-marketing works in a way that a company that initially issues One million shares fo stock and sells them for a $10 per share. Then, the total capital that the company makes accounts to $10 million. The company can effectively use these capitals to grow its business multi-fold.
The second purpose of stock-marketing is to give the investors purchasing their stocks to share the profit. That is, the investor can buy a particular stock and then can sell them to the other companies at a higher price in order to incur profit out of it. For example: If a company buys a stock at $10 per share and the market undergoes profit and the share price rises by $15 a share, the company can then sell them to make a profit of a 50% hike. The two purposes make it clear to know whet is stock-marketing better and use it to our advantage.
Stock-Marketing: Division and Related Terms
- The stocks are divided up into Common Stock and Preferred Stock.
- Common Stock: Allows voting rights. That is, a common shareholder has a say in the corporate meetings.
- Preferred Stock: Do not have voting rights. Marks the preference of the common share of the company in receiving the assets.
- Stock Exchange is the secondary market medium through which an existing owner can transact with the potential buyers.
- When one buys a share of stock in the stock market, they’re buying it from the other existing shareholder instead of the company.
- A bid is a price at which the trade is bought. While an offer is at which the trad is sold. The coincidence of bid and offer is known as a trade.
- A stockbroker is a person that helps average buyers and sellers match so that they get access to the exchanges.
- The law of supply and demand is an essential law in Stock Exchange.
As per the law, “ If there are more buyers for a stock than the sellers, the stock price will trend up. On the contrary, if there are more sellers of the stock than buyers, the price will trend down.”